Saturday, 2 October 2010

"Red Dave" knows he must follow Ed M to the centre-ground on inequality

Our prime minister "Red Dave" Cameron has a good sense for what you need to say (at the very least) if you want to talk your way towards the centre-ground of British politics and public opinion.

Centrist commentator John Rentoul has rightly spotted the significance of David Cameron's unwillingness to slam Ed Miliband's comments on inequality, in particular the scale of pay differentials between the bankers and the real world, in his interview with Simon Schama for the Financial Times.

As Rentoul blogs:

And I thought this was interesting, given the impossiblism of Ed Miliband’s declaration on Tuesday: “What does it say about the values of our society, what have we become, that a banker can earn in a day what the care worker earns in a year? It’s wrong, conference.” I would have thought the Tories might ask what he proposes to do about it and why such moral disapproval does not apply to footballers. But Cameron joins in:

The centre right “should never be frightened of standing up to big business”, he says. “We have tried to come down hard on excessive pay in the state sector. I think that there are pretty strong things to be said about pay in other parts of the economy. I don’t have a problem with doing that.”

Rentoul is unimpressed by the sogginess of a centrism which tries to appeal to the 75%+ who consistently believe the gap is too wide and should be reduced. (Even if they can't agree about how!). One can hear in Cameron's analysis the view that the public want to hear politicians acknowledge the issue ("there are pretty strong things to be said"), and may perhaps then be assauged without needing to offer much in the way of practical action. As Rentoul suggests, it remains to be seen if and how Ed Miliband intends to go any further than that.

Those demands of the new centre ground why "Red George" Osborne merited praise from this blog during the pre-election Chancellors' debate, for saying that inequality matters, when asked whether narrowing the gap between rich and poor was the job of government:

At the risk of agreeing with both of my colleagues here, I agree that a fairer society is the objective of a government.

When you have the gap between rich and poor widening, that creates a less fair society and a less strong society, and we don't feel so much part of that society

So I think it is the job of government.

There is some tension there with Osborne's claim today in a major Telegraph interview that Labour has flatlined on ideas, with the Coalition setting the intellectual agenda.

"The intellectual pulse is not there. They're flatlining ... My priority is making sure this Coalition Government is the source of new ideas. If we remain the intellectual powerhouse of British politics then I think that augurs pretty well."

Funny that, for a government which is ring-fencing the highest NHS spending in our history; pledging to meet the 0.7% target on, meekly implementing (most of) the Equality Act, committed to creating strategies sufficient to meet the legislative commitments to limit carbon emissions and significantly reduce child poverty by 2020.

I must have missed the right-of-centre think-tanks who were pushing the boundaries in the last 15 years to get all of that onto the political agenda as priorities for the next Conservative-led government.

The Osborne-Cameron problem at the level of ideas is that they have committed (often primarily for positioning reasons) to a significant set of progressive objectives and aspirations, while being motivated by a different Thatcher-Lawson ideology of tax cuts and a shrinking state, which would take them in the opposite direction to the ends they profess to support. The Big Society may be intended to be the bridge between the two, but we have yet to get any clear sense of how it will move from aspirational rhetoric to a policy agenda capable of meeting the egalitarian objectives of this government.

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Incidentally, to answer Rentoul's question about footballers directly, Fabian attitudes research shows that people think footballer's salaries are ludicrously inflated and "silly". They believe Premiership footballers should somewhat earn around £65,000 a year (something enthusiastically reported in the Daily Mail: "The great pay divide: Bosses and footballers 'earning 100 times what they're worth').

A range of different studies have tended to converge on the finding that most people don't think anybody really merits more than £150k+, partly because that is at the upper end of the world that most people can imagine before it all just turns into telephone numbers.

We have found a strong and deep-rooted public belief in justified and "fair inequality" and that "just rewards" mean rewarding effort, including through pay differentials. It is just that most people seem to believe that this should span something rather more like 10:1 or 15:1 across jobs, rather than 150:1 or more. Ed Miliband challenged pay differentials on a day: year ratio, in other words 365:1. That would mean somebody earning £5.5 million a year in a bank, against a care worker on around £15,000.

(What seemed to change after the crash was that where people had tended to assume that things they didn't understand were necessary of benign, that assumption was dropped and was replaced by anger at reckless gambling with the whole economy by people who didn't seem to understand it either).

But most people do not blame those who earn such outsize rewards from playing football. This is partly because the process of deciding who gets to play for England is clearly and transparently meritocratic - just as "good luck to them" is overwhelmingly the intuitive response to lottery winners, because we would all had a fair shot if we'd bought a ticket - and because we get a sense of what the point of that talent is, even if we think it is being over-valued.

That is not something people entirely believe about the city, law or the media and other professions. But the most vociferous objections of all are more about "how" than "how much". The public anger - much more strongly expressed in the Mail and the Telegraph than the Mirror - is greatest at perceived violations of fair process - mega-bonuses from a one-way bet after we bailed out the bank; renumeration committees with a "you scratch my back" feel among interconnected elites; and, for many people, simply the oddness of the idea of getting a bonus for doing your job well, when that is what the rest of us get paid salaries and wages for.